Economics

Eye in outer space: satellite imageries of container ports can predict world stock returns

H. Yu, X. Hao, et al.

Discover how satellite-based information on shipping containers can be a game-changer for forecasting stock returns. This innovative research by Honghai Yu, Xianfeng Hao, Liangyu Wu, Yuqi Zhao, and Yudong Wang reveals that tracking container numbers significantly predicts stock index returns across 27 countries, leveraging U-Net technology. Gain insights into an investment strategy that yields an impressive annualized return of 16.38%.

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Index

Abstract

This paper explores the use of satellite-based information on shipping containers to forecast stock returns. The authors use U-Net to identify container coverage areas in satellite images of major ports, using this as a proxy for container numbers. A forecast combination method is then applied to generate return forecasts. Results show that container numbers significantly predict stock index returns in 27 out of 33 countries at a daily frequency (2019-2021). An investment strategy using this data yielded an annualized return of 16.38%. The predictability is linked to the relationship between container numbers and economic activity.

Publisher

Humanities and Social Sciences Communications

Published On

Jul 07, 2023

Authors

Honghai Yu, Xianfeng Hao, Liangyu Wu, Yuqi Zhao, Yudong Wang

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